Monday, 3 August 2015

With equity indexes settling lower for the second consecutive trading day, the VIX was finally able to hold some gains (if minor), settling +3.6% @ 12.56 (intra high 13.55). Near term outlook offers the VIX 16/17s, the 20s look difficult... not least if the sp'500 can't get any daily closes <2050.

VIX'60min

VIX'daily3

Summary

*closing hour saw the VIX get whacked lower, as equities bounced from sp'2089 to 2098.
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Despite the closing hour weakness, today is day'1 UP of a new cycle. Last weeks high of 16.27 looks a valid target this week. Whether we max out in the 16s, 17s.. or even somewhat higher.. difficult to say.

*I remain long-VIX... seeking an exit in the 16/17s later this week.
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US equity indexes closed broadly lower, sp -5pts @ 2098. The two leaders - Trans/R2K, settled +0.3% and -0.6% respectively. Near term outlook offers further downside, at least to the recent low of sp'2063. However, any daily closes under the (still rising) 200dma will offer stronger downside to the 2050/25 zone.

The Friday high of sp'2114 is fading away, and with technical breaks all over the place, a target of sp'2060 by the Friday close is valid.. and that should equate to VIX 16/17s. With the USD +0.1% in the DXY 97.40s, commodities remain under pressure, Gold -$8, whilst Oil is -3.6% in the $45s.

sp'daily5

VIX'daily3

Summary

Clearly, we're set to close lower for the second consecutive day, now its a case of how low can the current cycle go.

Dow 17K remains an obvious target.. and that would equate to sp'500 somewhere in the 2050/25 zone.
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Considering the current 5/15min cycles, renewed weakness into the close looks due.
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3.35pm.. sp'2090.. with VIX 13s... a little tiresome.. but anyway... day'2 down... the week has started fine for the bears.

With key technical breaks on a number of individual stocks (today, notably AAPL), there is increasing clarity about the outlook across the next few months. The Dow looks headed for the 17k threshold, with the sp' back to the 2050/25 zone. A break under 2K looks out of range in the current cycle.

Dow'weekly1b

sp'daily5

Summary

*notable weakness in Oil, -3.5% in the $45s. The March low of $42s is set to be broken.. with first target of the psy' level of $40... and that certainly won't help energy stocks/broader market.
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So.. here we are.. a little morning chop.. but with few buyers.. the market has broken lower.

Right now, the key break in AAPL should flag up all sorts of warnings for those broadly long the market.

Considering the VIX is only in the 13s... - with 16/17s viable within a few days... the sp'500 looks set for a daily close under the 200dma - currently @ 2069, later this week.
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Notable weakness, metals, Gold -$5, with Silver -1.7%.... and that is with the USD still to break back above the giant DXY 100 level.

The underlying weakness is starting to show through again, with equity indexes breaking new intraday lows. It remains the case that a daily close under sp'2090.. along with VIX 14s will offer clarity that new lows (<2063) are due within the next 4-7 trading days.

sp'daily5

Summary

... besides the indexes, there is a truck load of notable weakness out there...

AAPL, daily

The break into the $118s is HUGELY significant for AAPL, and arguably the broader market. Target is the 105/100 zone.
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US equities remain subdued, choppy, and continue to lean on the weaker side. A daily close under sp'2100 (along with the 50dma) looks due.. with VIX begining a new up wave. Metals and Oil remain broadly weak.. as the USD remains close to the giant DXY 100 threshold.

Dow, daily

Summary

*I highlight the Dow as its arguably now leading the way lower, and the large caps' remain highly vulnerable to a stronger USD
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We've already seen a hint of the underlying weakness, and from a pure cyclical perspective, everything is currently lined up in favour of the equity bears... including the following....

...few will have noticed.. or likely care, but US bonds are set to breakout.... with a probable two months of upside into late Sept/early Oct.

TLT, weekly

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VIX update from Mr T.

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time for tea.
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12.14pm.. HUGE vol'/trades in AAPL.. as it loses the $120 threshold.

Any action in the $118s... and its a major problem for the bull maniacs.

US equities are bearishly subdued, with the sp' failing to hold the 2100 threshold, along with the 50dma at 2098. A daily close under 2090 - along with VIX in the mid 14s will offer clarity for the rest of the week. USD has turned fractionally negative, but the metals and oil remain weak.

sp'daily5

Dow, weekly'1b

Summary

So.. who wants to buy the Dow? The bigger weekly cycle remains ugly... with 17k as first target. Certainly, 17k looks tough to hit this week... but from a pure cyclical perspective... the trend is in favour of the bears.

For now... I'm very content to sit back for a few days... and just be patient on the short side.

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notable weakness: coal miners, CNX -3.5%... as King O' set to announce measures this afternoon.

strength: Airlines, UAL +3.8%
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AAPL continues to look vulnerable...

A break into the $118s would be powerfully bearish for the broader market.

US equities start the month with some chop.. leaning on the weaker side. Equity bears just need to see some sustained action under sp'2090 to offer clarity of where this week is headed. VIX is back on the rise, in the 13s... the daily/weekly cycle are both offering the 17s this Thurs/Friday.

sp'daily5

VIX'daily3

Summary

A new month.. and there is an awful lot to cover,, not least with the giant monthly cycles adjusting.

With the VIX having cooled from 16.27 last week... we now have a divergence on the MACD cycle.. which is set to turn positive tomorrow.. or at the latest... Wednesday. The 17s look a valid target... not least if we get a daily close <2090.

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notable weakness: copper miners, FCX -3.8%... set to break into the $10s.

Good morning. Futures are a touch lower, sp -1pt, we're set to open at 2102. USD is starting the month on a positive note, +0.2% in the DXY 97.50s. Metals are weak, Gold -$3, with Silver -0.2%. Oil remains broadly weak, -0.9%.

sp'60min

Summary

Welcome to August.. the next 8-10 weeks should see the market experience the loss of sp'2000. which in theory.. should result in a further spiral lower.

Equity bears should be seeking a daily close under the sp'2100 threshold.. but there will be particular clarity if <2090... and VIX 14s.

To be clear.. I do NOT expect new highs in the remainder of this year. This market looks damn tired.. and we're sure as hell due a significant correction.

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notable early movers..

GDX -1.1%.. as metal prices remain weak

DIS +0.4%... with earnings at the Tue' close.
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Monday morning Greek masssacre.

With the Greek market finally opening for the first time since June 26th, the Athex hit an early decline of -23%.... currently -17% or so. Outlook is for the 400s, and that doesn't even assume a GREXIT.
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China. Despite the Govt' buying and threats against anyone who might dare sell, the Shanghai comp' continues to slide, settling -1.1% @ 3622. The key low of 3373 is easily within range.. and sustained action under 3K looks increasingly likely.

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Doomer chat, Hunter with Martenson

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*awaiting a lot of econ-data this morning....
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Have a good Monday.... and indeed.. August :)
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